Question: 17] You are using a multifactor model to estimate the return on Bombardier and have derived the following estimates for the factor betas and risk
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17] You are using a multifactor model to estimate the return on Bombardier and have derived the following estimates for the factor betas and risk premia: Measure Beta Macro-economic Factor Risk Premia [ Rfactor- Rf Level of interest rates T-Bond rate 1.8% Term Structure T-Bond rate - T-Bill rate 0.6% Inflation rate CPI 1.5% Economic growth GNP growth rate 4.2% With a riskless rate of 4%, estimate the expected return on Bombardier. A] 11.1% B] 9.95% C] 14.1% D] 15.1%
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